Long Questions with Answers - Indian Economy On The Eve Of Independence Notes | EduRev

Economics Class 12

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Q.1. State the features of Indian economy at the time of independence.
Ans. Following were the main features of Indian economy at the time of independence:
(A) Rampant poverty: Huge population was the main cause of poverty. This resulted in acute unemployment and massive illiteracy thus poverty of the main features.
(B) Inconsistent Commercialization of Agriculture: Commercialization of agriculture took place only in a few productive areas. This resulted in an unequal level of productivity across India. While some states became rich, others remain poor due to factors such as low level of technology, lack of irrigation facilities and the use of negligible amount of fertilizers.
(C) Semi- Feudal Economy: Indian economy at the time of independence was stagnant and backward. The pace of development was extremely low. The growth rate of per capita income was only 0.5 per cent per year.
(D) Poor Infrastructure: The communication of transportation and generation of power was extremely low during that period. Thus poor infrastructure was the root cause resulting in slow economic progress of India.
(E) Little Growth of the Consumer Goods Industries: At the time of independence, sources of consumer goods industries like jute, textile, sugar, match box, etc., were established in India, which were aided by British capital. The profit of these industries went to Britain. As a result, these industries remained backward at that time.
(F) Decline of Cottage Industries: Agriculture has been the main industry in India. Prior to the British rule, India was well known for its handicraft industries in the field of cotton, silk textiles, metal and precious stone works, etc., which enjoyed worldwide market. But the policy of British colonial rule led to their downfall. At the time of independence, these industries were almost ruined.
(G) Limited Foreign Trade: India’s foreign trade was very limited. The British policies reduced India to the exporter of raw materials and importer of finished goods.
(H) Other Challenges: At the time of independence, Indian economy was facing many challenges like poverty, malnutrition, poor health facilities and rapidly increasing population.

Q.2. How did the British exploit Indian agriculture sector?
Ans.
 
(A) India is an agricultural country. 85 percent of the Indian population was engaged directly or indirectly on agriculture. In order to provide British Industries with cheap raw materials, the Indian farmers were forced to grow cash crops (like Indigo and cotton) instead of food crops like rice and wheat. This led to commercialization in India.
(B) However, despite the occupation of such a large population, this sector continued to experience stagnation and unusual deterioration.
(C) Although the agricultural sector was the main source of national income and employment, it remained backward and deficient. It was burdened with defective institutions like ‘Zamindari’ and ‘Jagirdari’.
(D) The British government had paid little attention to land reforms or to increasing agricultural productivity.
(E) India, once an important exporter of food grains, started suffering from ever worsening food shortage.
(F) Agricultural productivity was low because there was low level of technology, lack of irrigational facilities and negligible use of fertilizers. Cash crops of the farmers were to be ultimately used by the British industries at home.
(G) Furthermore, the country's partition at the time of independence gave a set-back to India’s agricultural production. A sizable portion of the undivided country’s highly irrigated and fertile land went to Pakistan, which impacted India’s agricultural production adversely. India’s jute goods industry suffered heavily due to lack of raw material. Thus, the Indian agricultural sector stagnated at the time of independence.

Q.3. what was the condition of the industrial sector on the eve of independence?
Ans.
Long Questions with Answers - Indian Economy On The Eve Of Independence Notes | EduRev(A) The scenario of the industrial sector under the British colonial rule was under-developed.
(B) British policies transformed the Indian economy into a mere supplier of raw materials and consumer of the finished industrial products from Britain.
(C) There was a lack of heavy, basic and capital goods industries and the country was almost totally dependent upon foreign nations for supply of machines, engines, spare parts, etc.
(D) Manufacturing capacity was also very limited. Modern industry began to take root in India during the second half of the 19th century.
(E) The first iron and steel company, TISCO (Tata Iron and Steel Company) was established in Jamshedpur. This plant began production in 1912.
(F) Industries like sugar, cement and paper also came up after the Second World War. However, there was an absence of capital goods industries at the time of Independence. As a result, the contribution of the industrial sector to the national GDP remained very low.

Q.4. Explain the factors responsible for the downfall of indigenous handicraft industries during British rule.
Ans.
The following were the factors responsible for the downfall of indigenous handicraft industries during British rule:
(i) Discriminatory Tariff Policy: The British rule in India primarily aimed at development of industries in Britain. The British adopted a discriminatory tariff policy in which, export of raw material from India and import of industrial products from Britain into India was tariff-free. However, a heavy duty was placed on the export of handicraft products. While the British products exploited the markets, the handicraft products lost their domestic as well as foreign market.
(ii) Hand-made versus Machine-made Products: Machine-made products from Britain were low cost products. These products gave a stiff competition to the handicraft products in India. Competition forced the craftsmen to shut-down their industries.
(iii) New Demand Patterns: With the advent of British culture, a new class emerged in India, which was keen to adopt the western Lifestyle. This changed the demand pattern against the Indian products and in favour of the British products. As a result, the handicraft industry suffered decay.
(iv) Introduction of Basic Infrastructure in India: The British Government introduced railways and other basic infrastructure in India to satisfy their colonial interests. Transportation facilitated movement of the British products across various parts of the country. Consequently, the market size for the low cost British products expanded while it shrunk for the relatively high cost Indian products. This added to the process of decay of the Indian handicrafts.

Q.5. Write a short note on the volume and composition of Indian trade during British rule.
Ans. 
Long Questions with Answers - Indian Economy On The Eve Of Independence Notes | EduRevIndia has always been an important trading nation. However, the restrictive policies of commodity production, trade and tariff pursued by the colonial government had a negative impact on the structure, composition and volume of India’s foreign trade. Consequently, India became an exporter of primary products such as raw silk, cotton, wool, indigo, jute, etc. and an importer of finished consumer goods like cotton, silk and woolen clothes and capital goods like light machinery produced in the industries based in Britain. Britain maintained a monopoly control over India’s exports and imports. More than 50 per cent of India’s trade was confined to Britain. Other countries with which India used to trade were China, Ceylon (Sri Lanka) and Persia (Iran). The opening of the Suez Canal further intensified British control over India’s foreign trade.

Q.6. Give a brief account of the state of various social development indicators on the eve of Independence.
Ans. The state of various social development indicators was also not quite encouraging:
(i) The overall literacy level was less than 16 per cent. Out of this, the female literacy level was as low as 7 per cent.
(ii) Public health facilities were either unavailable to large sections of the population or, when available, were highly inadequate. As a result, water and air-borne diseases were widespread and took a huge toll on life.
(iii) The overall mortality rate was inevitably very high. The infant mortality rate, particularly, was quite alarming at about 218 per thousand.
(iv) Life expectancy was also very low, that is, only 44 years.
(v) Extensive poverty prevailed in India during the colonial period. It contributed to the worsening demographic profile of India’s population.

Q.7. Explain the methods of colonial exploitation of the Indian economy.
Ans. The British colonial rule exploited the Indian economy in the following ways:
(A) Industrial Revolution took place in England in the eighteenth century. India was treated as a supplier of raw materials to the British industry. The British exploited the Indian economy to the maximum extent for cheap raw materials to support British industries.
(B) Indian economy was a market for the finished British products. British government developed railways in India only to meet this purpose.
(C) British imposed exploitative land revenue policy. The stagnation in the agricultural sector was caused mainly because of these policies. Under this policy, the profit accruing out of the agriculture surplus went to zamindars instead of the cultivators.
(D) The British colonial rule inflicted upon the Indian economy a very high cost of administration. It also made heavy remittances to Britain in the form of savings and surpluses from their business ventures in India.
(E) Before the British rule, Indian handicrafts enjoyed a worldwide reputation of being quality products. British colonial rule destroyed the demand for Indian handicrafts by imposing discriminatory tariff policy.
(F) British colonial rule deliberately neglected the development of economic infrastructure such as transportation, power, communication and social infrastructure such as education, health and housing, etc.

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